After OP journal, here, I had problems with MDPI (J. Intell.) as well. Since I have decided not to publish at OP, my Wordsum article had to be published somewhere. I thought about MDPI because it is the one that resembles OP the most.

MDPI journals are open-access, have faster time of review than the other ones. The journal charges some fees if there are many english (grammatical) errors to correct. MDPI does not charge fees for open access journals but only for young journals, e.g., within 5 years-old (which thing I have learned only later). Some MDPI journals even have the nice idea to make the reviews open access, although it is not a common practice even among MDPI journals.Continue reading →

In Pop Internationalism, Krugman defends international trade. Several ideas are put forward. The shrinking in manufacturing sectors (and its related jobs) has domestic causes, in particular the growing share of the sectors of services in the GDP. International trade with low-wage countries has nothing to do with this. The United States buys most of its imports from other advanced countries, whose workers have similar skills and wages. Imports are not so much greater than exports in the United States. While foreign competition can reduce domestic income through the terms of trade effect, it had negligible effect on the United States notably because importation represents a small share of the U.S. GDP. A country tends to export more when his relative advantage is greater than the other countries. Comparative (rather than absolute) advantage is only what matters; that is, a country with lower productivity than another country in all of his industries will still gain from trade rather than not. Competitiveness makes no sense because the U.S. income growth would not be any different in a situation where all other countries grow at equal rate than in a situation where all other countries have faster growth than the United States. A low-wage country, since it receives a large inflow of capital from a high-wage country, cannot have trade surpluses while having investment greater than savings (due to foreign capital) so they must run trade deficits. The formidable growth of the asian tigers, just like the soviet union before, is accounted for by growth in inputs (subjected to diminishing returns) but not by growth in efficiency (i.e., output per unit of input).

Below, I have selected the important passages of the books. They are highlighted.Continue reading →

The problems of the Great Depression (1873-1896) have been falsely to secular declines in prices. To begin, it was not clear there were any troubles during this period and even if it was the case, they were of trivial importance. And the idea that the period of 1870-90s experienced lower growth rates than the 1850-70s receives only weak support. Furthermore, the period of inflation (1897-1913) was possibly associated with lower growth, lower profit, lower real wages, higher unemployment rates, and higher interest rates. This disproves the keynesian argument that mild deflation is better than mild deflation. The period of Great Depression, either taking the period of 1873-1896 or 1880-1896 disproves the idea that unemployment increases as the price level declines. The 1855-1872 period of stable prices did not necessarily have greater growth than the 1880-1896 period of deflation. The deflation of the 1873-1896 period probably did not influence growth, wasn’t a source of burden for investment, as interest rates decline along with price levels, didn’t induce people to consume less, wasn’t associated with worsening living condition, but instead to a better standard of living. If Britain had difficulties during the Great Depression, they could be related to the lack of skilled workers and, more significantly, to the lack of major innovations and decline in exports. The causes are generally not well understood but two conclusions at least have been confirmed. First, the most important factor explaining slower growth is a fall in labour productivity. Secondly, the so-called problems in the Great Depression have nothing to do with declining prices.Continue reading →

The american economy in the 1873-1896 is usually portrayed as the Great Depression of 1873-1896 (Wikipedia). But to say this is a myth is not very far from the truth (Higgs, 1971; Catalan, 2011). One feature of this period is the deflation. And deflation is often viewed as bad, because it has been associated with periods of recession (which is curious given the proof to the contrary). And yet it is important to make the distinction between good and bad deflation (Bordo & Filardo, 2005). What is usually termed good deflation is productivity-driven and what is termed bad deflation is demand-driven. But what the U.S. economy of the 1870-1890s had was a good deflation, which was found to have produced better economic outcomes than inflation (Beckworth, 2007). The characterization that this period was felt as distressful to most people is wrong. Equally false is the claim that the U.S. during this period has gone through many deep recessions (Beckworth, 2007).Continue reading →

Or nearly so. I was planning to publish that blog article for the 31th December 2014. As you can see, I failed in this task, and didn’t finish in the right time. Anyway, I wrote this article, mainly because I am bothered that when people cite The Bell Curve the typical opponent responds with a link toward Wikipedia, specifically the part related to the “controversy” of The Bell Curve. It goes without saying that these persons did not read the books written in response to The Bell Curve. In fact, they have certainly read none of them. It is ridiculous to cite a book you didn’t read, but apparently, it does not bother many people, as I see.

For the 20 years of the book, I found appropriate to write a defense of the book. Or more precisely, a critical comment on the critics. I have decided to read carefully one of these books I can have access, and for what I have read here and there, it is probably the best book ever written against The Bell Curve. I know that Richard Lynn (1999) has already written a review before. But I wanted to go into the details. The title of the book I’m reviewing is :

In fact, I have read that book some time ago, but didn’t find the need to read everything in detail. And I was unwilling to write a lengthy review. But I have changed my mind because of some nasty cowards.Continue reading →

The OLS regression is a widely applied technique, and many variants of the classical regression exist. Among them, are the tobit and truncated regressions. Their use is recommended when the dependent (Y) variable is constrained in some ways. Both have a common feature. The Y variable is treated as latent variable (denoted Y*) rather than observed variable. This raises several complications compared to the classical OLS.Continue reading →

Let’s recall the story. Some austrian economists (Woods, 2009; Powell, 2009; Murphy, 2009) claimed that Warren Harding cut the taxes, and by this has promoted the economic recovery. But Kuehn (2010) challenges this view. Kuehn (2012) believes that it was the reduction in interest rates by the Fed that has helped the economy to recover. And Selgin (2014) answered that it was not the Fed’s monetary easing but gold flows that has contributed to the recovery.Continue reading →

The book Good Money (Selgin, 2008) already showed us that the idea of Gresham’s law as a natural feature of free market is just plain wrong. Historical evidence of anti-Gresham’s law is so rare that it is even more important to report them.

I dislike R, unlike some other softwares I use, such as SPSS and Stata. It’s extremely error prone. But it’s free, and can do almost everything (e.g., a few things Stata cannot do and a lot of things SPSS/AMOS cannot do). As always, I will update whenever I learn something new.Continue reading →